Lexun Electronics Files Second Application to HKEx: Cumulative Losses Exceed 1 Billion Yuan Over Three Years

According to information disclosed by the Hong Kong Stock Exchange, Jinjie Electronics Technology (Jiangsu) Co., Ltd. (hereinafter referred to as “Jinjie Electronics”) recently updated its prospectus. The joint sponsors are China International Capital Corporation and Guotai Junan International.

This marks Jinjie Electronics’ second filing with the Hong Kong Stock Exchange after its initial application in September 2025 failed.

In the prospectus, Jinjie Electronics describes the company as follows: “We are a leading global supplier in the wireless sensing SoC field, dedicated to providing innovative sensor chips. According to a report by Frost & Sullivan, based on 2025 revenue, we are the third-largest wireless sensing SoC company for automotive applications worldwide and the largest in China. The same source indicates that the automotive wireless sensing SoC market is a segment within the overall wireless sensing SoC market, with the top two players holding over 50% of the global automotive wireless sensing SoC market share. Additionally, the company is China’s first supplier to achieve mass production of TPMS chips (Tire Pressure Monitoring System).”

Jinjie Electronics states that the funds raised will be used to expand business scale, accelerate commercialization of new products, enhance core technology R&D capabilities, expand the global sales network, and pursue potential strategic investments or acquisitions.

Cumulative losses over three years exceed 1 billion yuan

Financially, Jinjie Electronics is in a state of “high growth and high losses.”

Financial reports show that from 2023 to 2025, the company’s revenue is approximately 223 million yuan, 347 million yuan, and 477 million yuan, respectively. The compound annual growth rate (CAGR) of revenue is as high as 46.2%.

Looking at the company’s business structure, TPMS chips have long been the core of revenue, accounting for 38.6% in 2023 and rising to 60.9% in 2025. This indicates that the company’s performance is highly dependent on a single market segment.

Jinjie Electronics states in its announcement, “Losses remain relatively stable year over year.”

From 2023 to 2025, net profits are -356 million yuan, -351 million yuan, and -331 million yuan, respectively, with total losses of about 1.038 billion yuan.

According to the prospectus, the main reasons for the losses are rigid R&D expenses, high-priced wafer inventories purchased early on, and the accounting impact of convertible financial instruments.

Data shows that from 2023 to 2025, R&D costs are 95.89 million yuan, 108 million yuan, and 102 million yuan, respectively. Notably, R&D investment exceeds 100 million yuan in both 2024 and 2025. During the same period, revenue is only 340 million yuan and 470 million yuan. For a company with revenue just over 400 million yuan, such R&D spending is significant.

Jinjie Electronics explains in the prospectus that part of the losses stem from high-priced wafer inventories purchased early on. In 2023, the company consumed wafers bought at high prices, leading to increased material costs and gross losses for its smart tire SoC products, which in turn affected profits.

Additionally, before the IPO, Jinjie Electronics issued convertible financial instruments to investors, which were recorded as liabilities. The company states that after listing, as these instruments convert into equity, its financial position will improve significantly.

Meanwhile, gross profit was 37.1 million yuan, 70.6 million yuan, and 133 million yuan, with gross profit margins of 16.6%, 20.3%, and 28%, respectively.

The company’s operating cash flow has remained negative, with outflows of 61.17 million yuan in 2023, expanding to 137 million yuan in 2024, and further increasing to 174 million yuan in 2025. Over three years, net cash outflow totals approximately 372 million yuan.

Customer dependence increasing, cash conversion cycle relatively long

The prospectus shows that Jinjie Electronics’ dependence on customers is rapidly growing.

From 2023 to 2025, revenue from the top five customers accounts for 35.6%, 52.1%, and 52.3% of total revenue, respectively. The largest customer’s contribution is 9.2%, 25.2%, and 31.9%.

The company admits that a significant portion of its revenue comes from a few customers. If one or more of these customers cease cooperation or significantly reduce their orders, it could have a material adverse effect on the company’s business, operations, and financial condition. Major customers have strong bargaining power and may leverage this in contract negotiations, seeking favorable pricing and other commercial terms, and requesting customized features. This could put the company at a disadvantage in transactions, increase costs, and harm profitability.

Furthermore, Jinjie Electronics relies on third-party wafer foundries and packaging/testing service providers. Due to dependence on these key suppliers, the company faces supply concentration risks.

In a fabless business model, Jinjie Electronics’ operations depend on the continued service of several suppliers, mainly including wafer foundries and chip packaging/testing providers.

During the historical period, procurement from the top five suppliers accounted for 52.6%, 64.5%, and 59.6% of total procurement, respectively. The largest supplier contributed 13.8%, 21.9%, and 18.0% of total procurement in those years.

Jinjie Electronics emphasizes that it cannot guarantee future relationships with key suppliers will be maintained. If supply of wafers or chip packaging/testing services is interrupted or delayed, the company may be unable to find alternative suppliers with similar capabilities and terms within a reasonable timeframe, or at all.

The company also faces risks related to relatively long cash conversion cycles.

The prospectus states that the company’s cash conversion cycle is relatively long, calculated as inventory turnover days plus trade receivables turnover days minus trade payables turnover days. The cycles are 314 days in 2023, 217 days in 2024, and 260 days in 2025, mainly influenced by inventory turnover days, which were 293, 188, and 208 days, respectively. The longer cycle in 2023 was due to inventory buildup to cope with cyclical semiconductor supply chain disruptions, which increased costs. As inventories are consumed and new inventory is purchased at normal prices and production schedules, this impact is expected to ease. Inventory turnover days dropped sharply to 188 days in 2024. In 2025, inventory turnover days remain relatively high, mainly due to seasonal factors leading to increased work-in-progress and raw material inventory, as well as the buildup of finished goods, to prepare for the second half of the year’s operations.

Jinjie Electronics states that it has implemented and will continue to implement inventory management measures to improve inventory turnover efficiency and operational cash flow.

From 2023 to 2025, trade and other receivables are 127 million yuan, 107 million yuan, and 196 million yuan, respectively, accounting for 56.9%, 30.7%, and 41% of the company’s revenue during those years.

Trade receivable turnover days increased from 74 days in 2023 to 77 days in 2024, and further to 92 days in 2025. The company’s credit terms with customers typically range from 30 to 90 days.